Kroger rolls out three new store brands

Supermarket giant Kroger Co. has rolled out three low-priced brands for its private-label products in an effort to increase sales.

CEO Rodney McMullen told a crowd of several hundred at Kroger’s annual meeting on June 26 that the Cincinnati-based company has launched three new lines for entry-level price points. Customers are seeing the brands – Psst, Check This Out and Heritage Farm – on hundreds of Kroger’s private-label products.

“These brands all are designed to reflect the good quality and excellent value customers expect from Kroger,” McMullen told the audience.

He told me after the meeting that the new brands cover the lower price point of Kroger’s private-label brands. It uses a “Good, Better, Best” pricing level for its private label-products. These brand names replace some existing names. For example, Heritage Farm replaces the Kroger Value brand name for fresh products now. Psst is used for shelf foods, and Check This Out will cover non-food items.

Kroger spent months – it typically ranges from nine to 18 months, McMullen said – doing customer research and developing new packaging. It launched the brands three months ago on a rolling basis, and they’re now in all stores.

Kroger president Mike Ellis said on a conference call last week after the company reported earnings that the new brands are succeeding.

“The new design calls out to customers with attractive, uplifting packaging, and the response so far has been really terrific,” he said. “The name better reflects the inherent quality of the brand, and we are already seeing positive acceptance from our customers.”

Kroger’s private-label brands – traditionally less expensive than national brands – made up 26 percent of total unit sales and 25 percent of sales dollars in the first quarter, Ellis said.

Retired Kroger CEO David Dillon, who is now chairman and participated in his last annual meeting in an official role on Thursday, said in a presentation last year that Kroger tests all of its private-label products with consumers and won’t roll any out unless they’re as good as or better than the national brand.